22 - Chapter 22: TELESCOPING THE TIMES The Great Depression...

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Chapter 22: TELESCOPING THE TIMES The Great Depression Begins Section 1: The Nation’s Sick Economy MAIN IDEA As the prosperity of the 1920s ended, severe economic problems gripped the nation. Although the economy of the 1920s boomed, trouble lurked beneath the surface. The textile, steel, and railroad industries were barely profitable. Mining and lumbering were in decline. In the late 1920s, the auto, construction, and consumer goods industries faltered. The biggest problem, though, was in agriculture. Wartime demand for food dropped, and farmers suffered. Unable to make mortgage payments, many lost their land. Congress tried to help farmers by passing laws that would boost food prices, but President Calvin Coolidge vetoed them. Farmers, short on money, bought fewer goods. That trend, combined with the consumer debt load, cut consumer spending. Consumer spending was also hurt by low incomes. These problems were not completely evident in the 1928 presidential election. Republican Herbert Hoover, pointing to years of prosperity under presidents Harding and Coolidge, won the election over Democrat Alfred Smith. Meanwhile, the stock market continued its amazing rise. People bought stocks, hoping to become rich. Many bought on margin, borrowing against future profits to pay for stocks today. If prices did not rise, though, there would be trouble. Stock prices began a decline in September of 1929. On October 29, known as Black Tuesday, they plunged sharply. More than 16 million shares of stock were sold that day until no more willing buyers could be found. By mid-November investors had lost more than $30 billion. The Depression spread around the world. The drop in consumer demand in the United
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This note was uploaded on 02/02/2010 for the course GOVT 131 taught by Professor Kenroberts during the Fall '07 term at Cornell University (Engineering School).

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22 - Chapter 22: TELESCOPING THE TIMES The Great Depression...

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